There have been numerous examples where homeowners were unable to pay their delinquent HOA dues because HOA collection agencies added collection fees on top of the delinquent HOA dues. These additional costs add up to the point where the homeowner can’t catch up, resulting in the HOA management company foreclosing on the property. This is particularly concerning if the HOA management company and the HOA collection agencies are associated with each other.
The most blatant example of this is FirstService Residential - an HOA management company, and Red Rock Financial Services - an HOA collection agency. According to the Nevada Real Estate Division, FirstService Residential manages over 359 communities and 100,169 units in Nevada. They are the biggest HOA management company in the state and in all of North America. In total, they oversee more than 6,500 properties and over 1.5 million residential units.
Red Rock Financial Services is a subsidiary of FirstService Residential Management.
Another link may be with Nevada Association Services (NAS), which recently acquired Hampton & Hampton Collections LLC and ATC Assessment Collection Group. NAS’s CEO, Joel Just, was the former President of RMI/Red Rock Financial Services. RMI became a subsidiary of FirstService Residential in 2004.
Terra West Management is another example. Terra West Management oversees 195 communities and 36,677 units. The CEO and Co-Founder is Katherine Matheson. She also Co-Founded Asset Management Services, an HOA collection agency.
According to the Nevada Real Estate Division, there are 466,356 HOA units in Nevada. Between FirstService Residential and Terra West Management, 136,846 out of 466,356 (or almost 30%) of all HOA units have some direct connection with an HOA Collection Agency.
An SGS survey conducted in March 2017 found that 80% of respondents would support a law prohibiting HOA management companies from also owning and operating their own HOA collection agencies.